Rules For Dealing In Real Estate

Dealing in real estate requires a reasonable amount of knowledge. Get familiar with some basic rules to point you in the right direction:

Get a license:

You need to have a license to run a real estate business. Take the licensing exam and get a business license from your county or city.

Advertise your business:

You need to promote your business via your website or by placing advertisements in the print and electronic media. The more people are aware of your business, the faster it will grow.

Understand the laws:

Get acquainted with the existing state laws and local regulations such as building codes and tax laws. Otherwise, you may waste a lot of money or even go to jail.

Employ an accountant:

Hire a certified accountant to check and handle monetary transactions and to help you figure out the real estate market.

Fix goals:

Set a firm and reasonable target to guide you to the pinnacle. Establish achievement-oriented goals such as viewing a specific number of properties every week, or calling seven prospects a week. This creates an impetus and sets you on the course to success.

Develop relationships:

Real estate is all about developing relationships. People are a key resource and the more number of people you are acquainted with, the more promising are the chances of coming across good properties to purchase, or finding clients for your properties.

Research thoroughly:

Assess and establish the actual value of the property. Don't get swayed by comparable sales that inflate the value of the property. Go online and check property sales prices to have a clue about the asking prices of similar properties in the neighborhood.

Grasp the numbers:

Understand the numbers while appraising property such as income, expenses, capitalization rate and anticipated cash flows. Determine the maximum you can put in with your current resources.

Limit risk:

Seek out and employ strategies to lessen risk. Study the global, national, and local real estate trends and judiciously construe market indicators to make the right decision. Always have a back-up plan and incorporate contingency clauses in the contract, so that you'll get back your deposit when a deal backfires.

Be set:

Prime yourself for dealing in real estate. Keep visiting cards, pen, and note pad on you always. You can never tell when you get to see or learn about a property for sale.

Apply knowledge:

Learn about structural inspections and property restrictions. Pick up valuable lessons from books, newspapers, magazines and websites and use them in executing your business strategy.

Follow the market:

Look to the local market for pointers. Understand the real estate environment in your area; discover what kind of property is selling and what's not, and the sale price. Such details and specifics will work in your favour and you will be singled out by clients.

Associate cautiously:

In a partnership, clearly draw the areas of control. If you are putting in the money, then step back and let your partner run the show. If your partner is investing in the project, then come forward and control the management reins.

Exit plan:

While buying property always have a couple of back-up strategies. Have a clear and well thought of exit plan keeping in view the unpredictability of the real estate market.

Candidly negotiate:

Directly ask the seller what he expects for the property rather than beating about the bush. Depending on the response, you can choose to pay what he has asked for, and yet acquire what you are seeking.

Great customer service:

You need to provide excellent service to clients. Displeased customers can kill your business through negative referrals.

Invest wisely:

Invest carefully in the real estate business. Don't invest because of rising prices, as there is no surety that prices will continue to rise at a specific rate. Enter into feasible deals and profit from increased property values.

Leverage:

Leverage is significant while dealing in real estate since by investing a small amount in each property you can purchase several properties. If the value of the properties grows, your rate of return increases.

Steep costs:

Dealing in real estate involves steep transaction costs such as agent commission, legal fees, land transfer taxes, and deed registration charges. Be well prepared for escalating costs.

Long-term business:

Don't draw inferences from initial results. Unless you operate the business on a long-term basis, you cannot completely grasp the mechanics of the business.

Real estate is a lucrative business and abiding by the rules will make you a success!